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Healthcare Business Models Clash with Reforms

John Commins, for HealthLeaders Media, August 29, 2012

"There are some very contradictory observations in this survey that go to the idea that it is really complex and these executives are at some level uncertain about what this is going to look like," Benton told HealthLeaders Media. "We have a hardwired healthcare system that is for all intents and purposes driven by fee-for-service and the transition to these value-based models is complex, it's threatening and it's really hard work."

For example, the survey shows that 82% of health system executives understand that they will have to reduce costs anywhere from 14% to 32% over the next five years if they hope to break even on reduced Medicare reimbursements.

"The 'do better with less' mantra seems to be coming more into focus. It is that path to effective execution that gets us there," Benton says. "Clearly this is going to be about how we practice medicine and do it in a way that recognizes that there are not unlimited resources."

However, many of those health system executives also say in the survey that can leverage their market position to maintain or increase payments from commercial plans. Benton says health plan executives say that's a non-starter.

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